HAIFA, Israel, May 15, 2012 /PRNewswire/ --
Elbit Systems Ltd.
(the "Company") (NASDAQ: ESLT,
TASE: ESLT), the international defense company, reported today
its consolidated financial results for the first quarter ended
March 31, 2012.
In this release, the Company is providing its usual US-GAAP
results as well as additional non-GAAP financial data, which are
intended to provide investors with a more comprehensive
understanding of the Company's business results and trends. Unless
otherwise stated, all financial data presented is GAAP financial
data.
Management Comment:
Joseph Ackerman, President and
CEO of Elbit Systems, commented: "In the first quarter, we recorded
revenue growth as compared to the corresponding quarter last year.
Much of this growth came from markets such as Latin America and Asia-Pacific, geographic regions with many
emerging economies and diverse defense markets, supported by
growing defense budgets. I foresee that in 2012 we will begin to
see the impact of our ongoing efforts, enabling the company to
address the industry's competitive challenges, both for the benefit
of our employees and for the Company's long-term success."
First quarter 2012 results:
Revenues in the first quarter of 2012 were $690.8 million, as compared to $620.3 million in the first quarter of 2011. The
leading contributor to the Company's revenues was the airborne
systems area of operations.
Gross profit amounted to $195.8
million (28.3% of revenues) for the first quarter of 2012,
as compared with gross profit of $185.6
million (29.9% of revenues) in the first quarter of 2011.
The non-GAAP gross profit in the first quarter of 2012 was
$200.9 million (29.1% of revenues),
compared to $193.2 million (31.1% of
revenues) in the first quarter of 2011.
Research and development expenses, net were $58.8 million (8.5% of revenues) in the first
quarter of 2012, as compared to $54.2
million (8.7% of revenues) in the first quarter of 2011.
Marketing and selling expenses were $61.4 million (8.9% of revenues) in the first
quarter of 2012, as compared to $55.0
million (8.9% of revenues) in the first quarter of 2011.
General and administrative expenses were $33.9 million (4.9% of revenues) in the first
quarter of 2012, as compared to $35.5
million (5.7% of revenues) in the first quarter of 2011.
Operating income was $41.7
million (6.0% of revenues) in the first quarter of 2012, as
compared to $40.9 million (6.6% of
revenues) in the first quarter of 2011. The non-GAAP operating
income in the first quarter of 2012 was $53.9 million (7.8% of revenues), as compared to
$54.9 million (8.9% of revenues) in
the first quarter of 2011.
Financial expenses, net were $7.8
million in the first quarter of 2012, as compared to
$10.7 million in the first quarter of
2011. Financial expenses in the first quarter of 2011 were
comparatively high due to expenses related to currency hedging
activities.
Taxes on income showed a tax expense of $6.6 million (effective tax rate of 18.9%) in the
first quarter of 2012, as compared to a tax expense of $5.3 million (effective tax rate of 17.4%) in the
first quarter of 2011.
Equity in net earnings of affiliated companies and
partnership was $4.0 million
(0.6% of revenues) in the first quarter of 2012, as compared to
$3.8 million (0.6% of revenues) in
the first quarter of 2011. The equity in net earnings of affiliated
companies and partnership in the first quarter of 2012 included
approximately $1.6 million in capital
gain related to the sale of the Company's interest in an affiliated
entity.
Net loss attributable to non-controlling interests was
$0.8 million in the first quarter of
2012, as compared to net income of $1.0
million in the first quarter of 2011.
Net income attributable to the Company's ordinary
shareholders was $32.9 million
(4.8% of revenues) in the first quarter of 2012, as compared to
$27.9 million (4.5% of revenues) in
the first quarter of 2011. The non-GAAP net income in the first
quarter of 2012 was $40.8 million
(5.9% of revenues), as compared to $38.6
million (6.2% of revenues) in the first quarter of 2011.
Diluted net earnings per shareattributable to the
Company'sordinary shareholders were $0.77 for the first quarter of 2012, as compared
with $0.65 for the first quarter of
2011. The non-GAAP earnings per share in the first quarter of 2012
were $0.96, as compared to
$0.90 in the first quarter of
2011.
The Company's backlog of orders was
$5,450 million as of March 31, 2012, as compared with $5,528 million as of December 31, 2011. Approximately 76% of the
backlog relates to orders outside of Israel. Approximately 71% of the Company's
backlog as of March 31, 2012, is
scheduled to be performed during the upcoming three quarters of
2012 and during 2013.
Operating cash flow was $51.8
million during the first quarter of 2012, as compared to
$40.1 million in the first quarter of
2011.
Non-GAAP financial data:
The following non-GAAP financial data is presented to enable
investors to have additional information on the Company's business
performance as well as a further basis for periodical comparisons
and trends relating to the Company's financial results. The Company
believes such data provides useful information to investors by
facilitating more meaningful comparisons of the Company's financial
results over time. Such non-GAAP information is used by the
Company's management to make strategic decisions, forecast future
results and evaluate the Company's current performance. However,
investors are cautioned that, unlike financial measures prepared in
accordance with GAAP, non-GAAP measures may not be comparable with
the calculation of similar measures for other companies.
The non-GAAP financial data includes reconciliation adjustments
regarding non-GAAP gross profit, operating income, net income and
diluted EPS. In arriving at non-GAAP presentations, companies
generally factor out items such as those that have a non-recurring
impact on the income statements, various non-cash items,
significant effects of retroactive tax legislation and changes in
accounting guidance and other items which, in management's
judgment, are items that are considered to be outside of the review
of core operating results.
In the Company's non-GAAP presentation, the Company made the
following adjustments, in each or some of the applicable periods:
(1) added back amortization of purchased intangible assets, (2)
added back significant reorganization, restructuring and other
related expenses, (3) added back impairment of investments,
including impairment of auction rate securities, (4)
subtracted gain from changes in holdings, including revaluation of
the previously held shares at the acquisition date when a business
combination is achieved in stages (step-up), (5) added back
impairment loss from discontinued operations, (6) excluded the
impact of the cessation of a program with a foreign customer and
(7) excluded the income tax effects of the foregoing.
These non-GAAP measures are not based on any comprehensive set
of accounting rules or principles. The Company believes that
non-GAAP measures have limitations in that they do not reflect all
of the amounts associated with the Company's results of operations,
as determined in accordance with GAAP, and that these measures
should only be used to evaluate the Company's results of operations
in conjunction with the corresponding GAAP measures.
Investors should consider non-GAAP financial measures in
addition to, and not as replacements for or superior to, measures
of financial performance prepared in accordance with GAAP.
Reconciliation of GAAP to Non-GAAP (Unaudited) Supplemental
Financial Data:
(US Dollars in millions)
Three Months Ended Year Ended
March 31 December 31
2012 2011 2011
GAAP gross profit 195.8 185.6 732.0
Adjustments:
Amortization of intangible
assets 5.1 7.6 30.9
Cessation of program [(*)] - - 72.8
Non-GAAP gross profit 200.9 193.2 835.7
Percent of revenues 29.1% 31.1% 29.7%
GAAP operating income 41.7 40.9 115.7
Adjustments:
Amortization of intangible
assets 12.2 14.0 57.3
Cessation of program - - 72.8
Non-GAAP operating income 53.9 54.9 245.8
Percent of revenues 7.8% 8.9% 8.7%
GAAP net income
attributable to Elbit
Systems' shareholders 32.9 27.9 90.3
Adjustments:
Amortization of intangible
assets 12.2 14.0 57.3
Cessation of program - - 72.8
Impairment of investment - - 0.5
Gain from change in
holdings (2.3) - -
Loss from discontiued
operations 0.1 - 9.4
Related tax benefits (2.1) (3.3) (23.7)
Non-GAAP net income
attributable to Elbit
Systems' shareholders 40.8 38.6 206.6
Percent of revenues 5.9% 6.2% 7.3%
Non-GAAP diluted net EPS 0.96 0.90 4.79
(*) Adjustment of expenses related to cessation of program,
which resulted in write-off of inventories and other related
costs.
Recent Events:
On March 19, 2012, the Company
announced that Midroog Ltd., an Israeli rating agency ("Midroog"),
announced that it had reaffirmed the "Aa1" rating (on a local
scale) to the Series "A" Notes issued by the Company in 2010 and to
any new Series "A" Notes up to NIS 900
million par value which may be issued by the Company.
On March 29, 2012, the
Company announced that following the filing of the Shelf Offering
Report dated March 27, 2012 (the
"Offering Report"), pursuant to the Shelf Prospectus dated
May 18, 2010, the public tender was
concluded in connection with the public offering in Israel of the Company's new Series A Notes
(the "New Series A Notes") through an expansion of the Company's
Series A Notes which were currently outstanding and registered for
trading on the Tel Aviv Stock Exchange Ltd. ("TASE"). Following the
results of the concluded public offering, the Company issued
807,717 units of New Series A Notes, bearing a fixed interest rate
of 4.84% per annum, with a price per unit of 1,029 NIS (approximately $276), (each unit in the principal amount of
NIS 1,000 par value). The immediate
gross proceeds received by the Company for the issuance of the New
Series A Notes was approximately NIS 831
million (approximately $223
million). The terms of the New Series A notes issued are
similar to the terms of the Company's outstanding unsecured and
non-convertible Series A Notes which were initially issued by the
Company pursuant to the shelf offering report dated June 6, 2010. The New Series A Notes form a
single series together with the currently outstanding Series A
Notes and are not linked (principal and interest) to any currency
or index. The Series A Notes, including the New Series A Notes
contain standard terms and conditions and do not restrict the
Company's ability to issue additional notes of any class or
distribute dividends in the future.
On May 8, 2012, the Company
announced that it concluded the private placement to Israeli
institutional investors (the "Private Placement") of NIS 92,283,000 par value (approximately
$24.3 million) additional Series A
Notes (the "Additional Series A Notes") in consideration for an
aggregate sum of approximately NIS 94.7
million (approximately $24.9
million). The terms of the issued Additional Series A Notes
are similar to the terms of the Series A Notes and the Additional
Series A Notes from a single series together with the currently
outstanding Series A Notes. The New Series A Notes and Additional
Series A Notes have been approved for listing on the TASE. The sale
and/or transfer of Additional Series A Notes are subject to the
limitations on re-sale of securities set forth in the Israeli
Securities Law of 1968 and the regulations promulgated there under
applicable to private placements. The New Series A Notes and
Additional Series A Notes are not and will not be registered under
the U.S. Securities Act of 1933, as amended (the "Securities Act"),
and may not be offered or sold in the
United States or to U.S. Persons (as defined in Regulation
"S" promulgated under the Securities Act) without registration
under the Securities Act or an exemption from the registration
requirements of the Securities Act.
On May 10, 2012, the Company
announced that its joint venture with Rockwell Collins, Vision
Systems International, LLC (VSI), a leader in advanced Helmet
Mounted Display (HMD) technology, has received a new contract with
a total value of more than $32
million for the delivery of the Joint Helmet Mounted Cueing
System (JHMCS) to The Boeing Company, for the U.S. Navy and Air
Force and Foreign Military Sales (FMS) to include: Finland, Australia, Belgium, Canada, and Switzerland. Deliveries will commence this
year and continue through 2013.
Dividend:
The Board of Directors declared a dividend of $0.30 per share for the first quarter of 2012.
The dividend's record date is May 29,
2012, and the dividend will be paid on June 11, 2012, net of taxes and levies, at the
rate of 25%.
Conference Call:
The Company will be hosting a conference call today,
Tuesday, May 15, 2012 at 9:00am Eastern Time. On the call, management will
review and discuss the results and will be available to answer
questions.
To participate, please call one of the teleconferencing numbers
that follow. If you are unable to connect using the toll-free
numbers, please try the international dial-in number.
US Dial-in
Numbers: 1-888-668-9141
UK Dial-in Number: 0-800-917-5108
ISRAEL Dial-in Number: 03-918-0609
INTERNATIONAL Dial-in Number: +972-3-918-0609
at 9:00am Eastern Time; 6:00am Pacific Time; 2:00pm UK Time; 4:00pm Israel Time
This call will also be broadcast live on Elbit Systems' web-site
at http://www.elbitsystems.com. An online replay will be
available from the same link a few hours after the call ends.
Alternatively, for two days following the call, investors will
be able to dial a replay number to listen to the call. The dial-in
numbers are:
1-888-326-9310 (US) or +972-3-925 5900 (Israel and International).
About Elbit Systems
Elbit Systems Ltd. is an international defense electronics
company engaged in a wide range of programs throughout the world.
The Company, which includes Elbit Systems and its subsidiaries,
operates in the areas of aerospace, land and naval systems,
command, control, communications, computers, intelligence
surveillance and reconnaissance ("C4ISR"), unmanned aircraft
systems ("UAS"), advanced electro-optics, electro-optic space
systems, EW suites, airborne warning systems, ELINT systems, data
links and military communications systems and radios. The Company
also focuses on the upgrading of existing military platforms,
developing new technologies for defense, homeland security and
commercial aviation applications and providing a range of support
services.
For additional information, visit:
http://www.elbitsystems.com.
Attachments:
Consolidated balance sheet
Consolidated statements of income
Condense consolidated statements of cash flow
Consolidated revenue distribution by areas of operation and by
geographical regions
This press release contains forward-looking statements (within
the meaning of Section 27A of the Securities Act of 1933, as
amended and Section 21E of the Securities Exchange Act of 1934, as
amended) regarding Elbit Systems Ltd. and/or its subsidiaries
(collectively the Company), to the extent such statements do not
relate to historical or current fact. Forward Looking
Statements are based on management's expectations, estimates,
projections and assumptions. Forward-looking statements are
made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, as amended. These
statements are not guarantees of future performance and involve
certain risks and uncertainties, which are difficult to predict.
Therefore, actual future results, performance and trends may
differ materially from these forward-looking statements due to a
variety of factors, including, without limitation: scope and length
of customer contracts; governmental regulations and approvals;
changes in governmental budgeting priorities; general market,
political and economic conditions in the countries in which the
Company operates or sells, including Israel and the
United States among others; differences in anticipated and
actual program performance, including the ability to perform under
long-term fixed-price contracts; and the outcome of legal and/or
regulatory proceedings. The factors listed above are not
all-inclusive, and further information is contained in Elbit
Systems Ltd.'s latest annual report on Form 20-F, which is on file
with the U.S. Securities and Exchange Commission. All
forward-looking statements speak only as of the date of this
release. The Company does not undertake to update its
forward-looking statements.
ELBIT SYSTEMS LTD.
CONSOLIDATED BALANCE SHEETS
(In thousands of US Dollars)
March 31, December 31,
2012 2011
Audited Audited
Assets
Current assets:
Cash and cash equivalents $ 173,873 $ 202,577
Short-term bank deposits 284,103 21,693
Trade and unbilled receivables, net 652,877 669,524
Other receivables and prepaid expenses 143,591 180,024
Inventories, net of customers advances 819,679 761,269
Total current assets 2,074,123 1,835,087
Investments in affiliated companies,
partnership and other companies 113,078 110,159
Long-term trade and unbilled receivables 197,376 162,762
Long-term bank deposits and other
receivables 13,908 12,215
Deferred income taxes, net 34,478 36,130
Severance pay fund 293,969 283,477
652,809 604,743
Property, plant and equipment, net 513,037 517,608
Goodwill and other intangible assets, net 752,420 763,072
Total assets $ 3,992,389 $ 3,720,510
Liabilities and Equity
Short-term bank credit and loans $ 2,851 $ 2,998
Current maturities of long-term loans and
Series A Notes 138,270 127,627
Trade payables 272,110 316,264
Other payables and accrued expenses 772,961 743,866
Customer advances in excess of costs
incurred on contracts in progress 436,419 407,222
1,622,611 1,597,977
Long-term loans, net of current
maturities 306,303 302,255
Series A Notes, net of current maturities 431,037 235,319
Employee benefit liabilities 403,535 394,115
Deferred income taxes and tax
liabilities, net 50,150 48,467
Customer advances in excess of costs
incurred on contracts in progress 161.605 154,696
Other long-term liabilities 64,852 59,961
1,417,482 1,194,813
Elbit Systems Ltd.'s equity 922,444 898,337
Non-controlling interests 29,852 29,383
Total equity 952,296 927,720
Total liabilities and equity $ 3,992,389 $ 3,720,510
ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands of US Dollars, except for share and per share amounts)
Three Months Ended Year Ended
March 31, December 31,
2012 2011 2011
Unaudited Audited
Revenues 690,788 620,258 2,817,465
Cost of revenues 495,037 434,613 2,085,451
Gross profit 195,751 185,645 732,014
Operating expenses:
Research and development, net 58,766 54,214 241,092
Marketing and selling 61,361 54,987 235,909
General and administrative 33,941 35,510 139,349
154,068 144,711 616,350
Operating income 41,683 40,934 115,664
Financial expenses, net (7,815) (10,662) (13,569)
Other income, net 930 194 1,909
Income before income taxes 34,798 30,466 104,004
Taxes on income (6,560) (5,300) (13,624)
28,238 25,166 90,380
Equity in net earnings of
affiliated companies and
partnership 4,038 3,751 15,377
Income from continuing
operations 32,276 28,917 105,757
Loss from discontinued
operations, net (156) - (15,977)
Net income 32,120 28,917 89,780
Less: net loss (income)
attributable to non-controlling
interests 761 (988) 508
Net income attributable to
Elbit Systems Ltd.'s
shareholders 32,881 27,929 90,288
Earnings per share attributable
to Elbit Systems Ltd.'s
shareholders:
Basic net earnings (losses) per
share
Continuing operations 0.77 0.65 2.33
Discontinued operations - - (0.22)
Total 0.77 0.65 2.11
Diluted net earnings (losses)
per share
Continuing operations 0.77 0.65 2.31
Discontinued operations - - (0.22)
Total 0.77 0.65 2.09
Weighted average number of
shares used in computation of
basic
earnings per share (in
thousands) 42,489 42,732 42,764
Weighted average number of
shares used in computation of
diluted earnings per share (in
thousands) 42,663 43,223 43,131
Amounts attributable to Elbit
Systems Ltd.'s common
shareholders
Income from continuing
operations, net of income tax 32,974 27,929 99,778
Discontinued operations, net of
income tax (93) - (9,490)
Net income attributable to
Elbit Systems Ltd.'s
shareholders 32,881 27,929 90,288
ELBIT SYSTEMS LTD.
CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands of US Dollars)
Three Months Ended Year Ended
December
March 31, 31,
2012 2011 2011
Unaudited Audited
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income $ 32,120 $ 28,917 $ 89,780
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 35,485 37,155 150,618
Write-off impairment and
discontinued operations, net 156 - 15,977
Stock based compensation 216 356 1,996
Amortization of Series A Notes
discount and related issuance
costs 87 (152) 422
Deferred income taxes and
reserve, net (738) 622 (8,777)
Loss (gain) on sale of property,
plant and equipment 115 (502) (1,645)
Loss (gain) on sale of investment (791) 67 2,189
Equity in net loss (earnings) of
affiliated companies and
partnership, net of dividend
received(*) (1,468) 7,812 (270)
Changes in operating assets and
liabilities, net of amounts
acquired:
Increase (decrease) in short and
long-term trade receivables, and
prepaid expenses 14,726 29,328 (65,062)
Increase in inventories, net (58,410) (58,248) (95,363)
Decrease (increase) in trade
payables, other payables and
accrued expenses (3,492) (27,386) 17,225
Severance, pension and
termination indemnities, net (2,280) 3,145 1,879
Increase in advances received
from customers 36,107 18,949 81,946
Net cash provided by operating
activities $ 51,834 $ 40,063 $ 190,915
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property, plant and
equipment (19,768) (37,830) (121,977)
Acquisition of subsidiaries and
business operations - - (12,173)
Investments in affiliated
companies and other companies (507) (6,786) (13,555)
Proceeds from sale of property,
plant and equipment 1,557 2,417 15,059
Proceeds from sale of investments 705 - 329
Investment in long-term deposits (192) 1,616 (609)
Proceeds from sale of long-term
deposits 283 - 40,396
Investment in short-term deposits
and available for sale securities (275,181) - (88,842)
Proceeds from sale of short-term
deposits and available for sale
securities 14,237 (37,104) 126,306
Net cash used in investing
activities $ (278,866) $ (77,687) $ (55,066)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from exercise of options 554 1,496 3,833
Purchase of non-controlling
interests - (73,455) (71,000)
Repayment of long-term bank loans (136,638) (2,680) (73,666)
Proceeds from long-term bank
loans 125,254 24,252 172,303
Proceeds from issuance of Series
A Notes 217,420 - -
Series A Notes issuance costs 1,889 - -
Purchase of treasury shares (10,004) - (10,101)
Repayment of Series A Notes and
convertible debentures - (2,121) (29,998)
Purchase of convertible
debentures of a subsidiary - - (2,121)
Dividends paid - - (61,633)
Tax benefit in respect of options
exercised - - 169
Change in short-term bank credit
and loans, net (147) 77,714 (12,117)
Net cash provided by (used in)
financing activities $ 198,328 $ 25,206 $ (84,331)
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (28,704) (12,418) 51,518
CASH AND CASH EQUIVALENTS AT THE
BEGINNING OF THE YEAR 202,577 151,059 151,059
CASH AND CASH EQUIVALENTS AT THE
END OF THE YEAR 173,873 138,641 202,577
* Dividend received from
affiliated companies and
partnership $ 2,570 $ 11,563 $ 15,107
ELBIT SYSTEMS LTD.
DISTRIBUTION OF REVENUES
CONSOLIDATED REVENUE BY AREAS OF OPERATION:
Three Months Ended Year Ended
March 31 December 31
2012 2011 2011
$ millions % $ millions % $ millions %
Airborne systems 281.5 40.8 251.1 40.5 969.4 34.4
Land systems 91.6 13.3 83.4 13.4 405.3 14.3
C4ISR systems 218.8 31.7 193.7 31.2 996.4 35.4
Electro-optics 68.5 9.8 64.8 10.5 300.2 10.7
Other (mainly
non-defense
engineering and
production
services) 30.4 4.4 27.3 4.4 146.2 5.2
Total 690.8 100.0 620.3 100.0 2,817.5 100.0
CONSOLIDATED REVENUES BY GEOGRAPHICAL REGIONS:
Three Months Ended Year Ended
March 31 December 31
2012 2011 2011
$ millions % $ millions % $ millions %
Israel 139.8 20.2 170.1 27.4 697.8 24.8
United States 213.3 30.9 209.1 33.7 890.4 31.6
Europe 114.1 16.5 111.2 17.9 545.5 19.3
Other countries 223.6 32.4 129.9 21.0 683.8 24.3
Total 690.8 100.0 620.3 100.0 2,817.5 100.0
Company Contact:
Joseph Gaspar, Executive VP &
CFO
Tel: +972-4-8316663
j.gaspar@elbitsystems.com
Dalia Rosen, VP, Head of
Corporate Communications
Tel: +972-4-8316784
dalia.rosen@elbitsystems.com
Elbit Systems Ltd.
IR Contact:
Ehud Helft
Kenny Green
CCG Investor Relations
Tel: +1-646-201-9246
elbitsystems@ccgisrael.com
SOURCE Elbit Systems Ltd